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Grexit

What we can all learn from the Greek government.

You’ve got to admire the chutzpah of the new Greek government.  Grexit Image

For those of you who may have understandably lost the thread, or all semblance of interest, in the continuing saga of Greece and the EU here is a brief recap. Greece, as the story goes, has behaved like a teenage slob. But his behaviour is deemed not quite yet irredeemable because the other EU countries have lent it a great deal of money in return for it putting a stop to wasting loads of cash and getting off its idle butt and making some of its own. 

But while Greece twitched impatiently on the naughty step facing many years of savage cuts in its already meagre public service budget, the matronly International Monetary Fund – the EU’s own private lender – decided it wants all the money back.  In nice manageable instalments, of course, EUR203m on May 1, EUR770m on May 12 and another EUR1.6bn in June, but money back it is.

Discipline, that’s the ticket.

But Greece has thrown a sulk and morphed into vile teenager mode by electing an old-style hard-left Government which is threatening to leave the party and slam the door, very loudly behind it.The starched Governess, aka Germany, and Greece’s biggest creditor reacted instantly and demanded the cash - or else.

Greece immediately responded by sending the German government a bill for £205bn for reparations for all the damage the Nazis did in the Second World War between 1941 and 1945. Unsurprisingly, Germany said it paid years ago and they can get stuffed. Cue sound effect of door slamming hard and a shout of whatever is the Greek for: “I hate you!”

The simple fact is that Greece may well end up exiting the EU, William Hill have just stopped taking bets on this,  and this terrifies the remaining members because the most frightening outcome is that it makes absolutely no difference whatsoever – leaving the same option apparently open to every other member state that’s broke, i.e. almost all of them.

So what can we simple folk in financial services learn from this? Let’s see.The answer is not to get into all this trouble in the first place.

Don’t over-extend and take on debt you cannot afford to service, it will not go away and will only get more burdensome. That’s one.

Don’t take on tenants who can’t afford the rent – there’s another.

Also bear in mind that in financial services there is a thing called cooling-off. This means that, fortunately, with regard to your savings or investments if you feel you are under undue pressure to sign on the dotted line or you just change your mind – you have 14 days to do so.

But for me there real message here is that if you are unhappy with a product to which you are committed – switch it. Whether this is an investment, a savings account or debt like a mortgage or utility bill it has become easier and easier to switch out and almost inevitably make your life a bit more comfortable.

Either that – or it’s the naughty step.

By Steve Mcdowell

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